U.S. Natural Gas Exports Stirs Debate

Now, tomorrow President Obama delivers his State of the Union address, and may well discuss energy, as he did four years ago. But energy analyst Sarah Ladislaw says a daunting goal is getting trickier.

SARAH LADISLAW: This administration did not come in with small plans for energy markets or for energy policy. Their big plan was to try and de-carbonize the energy sector.

INSKEEP: Reduce carbon emissions by relying less on coal, oil and gas.

LADISLAW: Primarily done for the purpose of battling climate change.

INSKEEP: Didn't happen.

LADISLAW: Didn't happen.

INSKEEP: What happens now is the subject of our Business Bottom Line. The president has not put a climate change bill before Congress, or hasn't gotten one out of Congress. His administration has achieved greater fuel efficiency in cars, but titanic changes, says Sarah Ladislaw, overshadowed all of this. Oil and gas production soared.

LADISLAW: It was something that was made possible not necessarily just by these technology combinations, but by the fact that we have a very permissive state and local regulatory environment for this kind of development. We have the right kind of industry, huge numbers of small companies that go out there and try and do innovative things with technologies to develop resources, and the fact that, you know, people own the mineral rights under their property and so they're able to sort of lease out their property for this kind of development.

Essentially what it's done is revolutionized what's available here in the United States in terms of oil and gas. Now we look at, you know, having enough energy. We look at having enough sort of, you know, domestically-sourced natural gas and oil. We'll still be sort of an oil importer and integrated into the global market, but what does the United States think of itself in this new context?

How do we think about, you know, whether or not we want to export natural gas? This a huge question that's facing the federal government right now. Do we want to export this to other places? Will that have a price impact here domestically?

STEVE INSKEEP. HOST: Let me explain that. It's easier to export natural gas now 'cause you don't have to send it through a pipeline. You can liquefy it.

LADISLAW: Yes.

HOST: And you're telling me that if we start exporting natural gas, there'll be less of it here and the price might go up? Like, my utility bills might go up.

LADISLAW: Well, that's the big question. So the Department of Energy is actually facing a number of different permit applications. They've already permitted one to be able to export natural gas to countries with whom we do not have a free trade area agreement. If we do allow exports, how much would be exported? You know, what does the - what makes sense in the market for exports from the United States to places like Europe or places like Asia?

How much can we expect that demand pull to be from gas in the United States? But then also, what kind of impact will that have on prices here? Most of the studies have said that the price impact would be sort of minimal.

HOST: What does it mean for an administration that wanted to begin moving us away from fossil fuels, if they've been able to make some progress in energy efficiency and renewable energy but at the same time there's been this just unbelievable gusher of fossil fuels that they did not anticipate?

LADISLAW: Yeah. It's sort of the great irony of their time. They came in thinking the world looked one way and it fundamentally looks different, and so I think it means that if you believe that you need to decarbonize the energy sector for the purposes of doing something about climate change, then you have to seriously evaluate what this oil and gas means in that context.

How do you put yourself on a pathway to being able to reduce emissions over the longer term, while not, you know, killing this golden goose, which is essentially providing low cost energy for the United States right now in a time of fiscal distress, offering the potential for lots of jobs going forward, and putting you sort of in a different energy position from a strategic standpoint?

HOST: I want to mention one other thing. I've been listening to you describe a remarkably complex system where every piece of it affects every other piece, where a shipment of liquefied natural gas to Europe might raise utility bills in Idaho. And then I'm thinking about the way that our energy debate usually goes in this country. And it's a few simple things. Keystone pipeline, yes or no. Drill, baby, drill. Gas prices up in summer again.

Gas prices back down. I'm feeling like our national conversation about energy is really dumb.

LADISLAW: Well, you might have said that, not me. But I would be not the only analyst in town to be accused of being asked a question about policy and saying, oh, well, it's more complicated than that. One of the reasons why I think that people involved in this debate coalesce around issues like Keystone pipeline or issues like LNG Exports is that they are these pressure points.

They're places where a decision has to be made, and that decision, whether it's Keystone pipeline or whether it's LNG Exports, not one of those decisions is going to sort of make or break our energy future, but it's a point where people can put pressure on the administration to signal what they believe.

HOST: Sarah Ladislaw of the Center for Strategic and International Studies. Thanks for coming by.